Apex court hearing: Rampant corruption in Steel Mills irks SC

PIA, Railways and Steel Mills ‘finished’ due to corruption, mismanagement: CJ.

ISLAMABAD:

Remember the Steel Mills? The Supreme Court certainly does.

The apex court took the Ministry of Production to task on Tuesday for failing to take action against losses worth billions in Pakistan Steel Mills (PSM) – the same institution that the court had stopped from a dubious privatisation deal many years ago in a move which had first brought the current chief justice and judicial activism to the forefront.

PSM has since fallen victim to unprecedented levels of corruption, according to a forensic audit report conducted by an independent audit firm Awais Hyder Liaqat Nouman. The report, provided to the ministry six months ago, revealed that, during fiscal year 2008-2009, losses worth Rs26.526 billion were incurred, according to the PSM counsel, Fakhruddin G Ebrahim. The report also showed a breakup of this loss: Business losses amounted to Rs4.68 billion, losses due to corruption were Rs9.99 billion and losses due to mismanagement and negligence were Rs11.84 billion.

A three member-bench headed by Chief Justice Iftikhar Muhammad Chaudhry strongly admonished accountability agencies and the relevant ministry for their failure to take action.

Ebrahim informed the court that the PSM chairman had been arrested on corruption charges, but never spent a single day in jail – he was admitted to the hospital immediately after his arrest. Justice Tariq Pervez said that corrupt officials were still part and parcel of the steel mills administration. The chief justice said the case would be sent to the National Accountability Bureau (NAB).

However, Justice Khilji Arif Hussain criticised NAB, saying that, while corruption in PSM was common knowledge, NAB had not taken any action against it. Ebrahim informed the court that all of the accused were on interim bail, and no cases were being processed against them for a variety of reasons.

Chief Justice Chaudhry said it was clear that the production ministry, NAB and Federal Investigation Agency (FIA) were all aware of who the corrupt officials are, but refuse to take action against them. Ebrahim blamed the FIA for inaction, pointing out that five inquiries had been initiated by the investigation agency, but no case had been registered so far.

“As per the admission of Production Secretary Gul Muhammad Rind, the forensic audit report was received by his ministry about six months back. We are surprised to note that no steps so far have been taken by the ministry despite the fact that Pakistan Steel Mills is not being run properly,” the court observed in its written order.

The court asked the production secretary why action had not been taken immediately after the ministry received the audit report – his response was that the ministry was contemplating referring all cases and inquiries pending with the FIA to NAB.

The apex court decided to give the ministry of production a chance to mull this decision – but added a strict reminder: “The corruption and mismanagement in leading institutions of the country forced the Supreme Court to intervene to remind the relevant accountability forums of their primary responsibilities,” observed Justice Hussain.

Meanwhile, the chief justice took the opportunity to point out the failure of public sector enterprises across the board. Referring to the audit report, the chief justice lamented that Pakistan International Airlines, Pakistan Railways and Pakistan Steel Mills were “finished” due to corrupt practices, negligence, overstaffing on ‘sifarshi chits’ and the quota system.

“In view of this report, which only pertains to the financial year 2008-2009, it is not known how much loss has been occurred in this organisation (in total),” the chief justice said.

The next hearing will take place on March 15.

Published in The Express Tribune, March 14^th, 2012.